National Union of Journalists response to the Gowers Review

On 2 December 2005 Chancellor Gordon Brown announced a review of "Intellectual Property" law. A call for submissions was issued on 23 February, with a deadline of 21 April. These are the NUJ's respones to the detailed questionnaire.

Response to review questionnaire

1. How IP is awarded

(a) Are there barriers to obtaining IP rights due to system complexity? What could be done to improve this situation?

For copyright, the problem is not system complexity: it is the abuse of dominant market positions by publishers and broadcasters in their dealings with freelances. Under the terms of the WIPO treaties copyright is of course obtained by the act of creation, without formality. The problems with UK law concern the process of licensing.

Our major proposal is that there needs to be regulation of the contracts under which copyright and authors' rights are licensed. Recent legislation in Germany provides a useful model. This should address this market abuse and will also encourage standards in licensing, simplifying negotiation for all parties. see main submission.

(b) How easy is it to find out about obtaining IP rights? What could be done to improve awareness for businesses and innovators? Is there sufficient awareness of the need to protect IP internationally?

Licensing of new copyright works by a publisher or producer is a very simple matter of negotiation with the creator. We have proposals on locating the creators of older works and dealing with the question of "orphaned" works: see Identifying rightsholders (main submission) and 'Orphaned works' (main submission).

We also have concerns about the terms under which end-users are granted access to works by publishers and producers, in particular the implications of Digital Rights Management that involves encryption: see main submission.

We note that journalists are not only creators of copyright works but also among the heaviest of users. We therefore share with any other citizen a strong interest in unhindered access on reasonable terms.

(c) Are there barriers to obtaining UK IP rights on grounds of cost? What drives these costs?

See (a) above.

(d) How do these costs compare internationally in your organisation's experience?

There are too many differences between different markets for journalism - especially concerning the size of markets in different languages - for comparisons to be meaningful. We note that individual authors licensing work outside their home country face considerable barriers when it comes to collecting payments from recalcitrant customers and to enforcement of their copyright.

(e) Do you have any comments on the UK Patent Office fees structure for obtaining and renewing IP protection?

N/A

(f) Is lack of trust in the system a barrier? To what extent do you rely on other tools to bring innovation to the marketplace, such as being first to market, maintaining trade secrets, or using an open innovation model to generate value through reputation or network effects?

The abuse of dominant positions and the perception that the entire archive of news and recorded culture is being locked up by major corporations poses a terminal threat to public trust in the concept of copyright. The public are, we believe, supportive of rights for individual authors/creators - especially when they realise that they may themselves be authors. See main submission.

(g) Are there specific barriers to obtaining IP rights in your sector?

The problem for individual authors who are freelances is not obtaining, but retaining rights See (a) above and main submission.

(h) Are there specific barriers to obtaining IP rights for small businesses or individuals?

See (b) above.

(i) How well does the national system for awarding IP, administered by the Patent Office perform? How well do the international and European systems work?

Copyright is not awarded but, under the WIPO treaties, is a right conferred on the author by the act of authorship, without formality.

2. How IP is used

(a) What types of IP does your organisation use and why?

The NUJ represent 40,000 journalists - including writers, researchers, photographers, illustrators and editors. Almost all our members make their living as authors of copyright works. Those who are freelances make their living by licensing works individually - or, usually under coercion, assigning them. See main submission.

(b) To what extent do you seek multiple overlapping forms of IP protection?

NUJ members overwhelmingly deal only with copyright. We expect, however, that an increasing number of freelance members will be needing trademark protection in order to defend their website addresses.

(c) To what extent are these decisions influenced by sector-specific considerations?

N/A

(d) How does your company value its IP? Are there problems with raising finance against intangible assets based on IP? What improvements could be made in this area?

We are not aware that any of our freelance members has ever managed to raise finance against the value of their portfolio. This has as much to do with the failure both of finance and of government business support initiatives to deal with one-person businesses as it does with the difficulties of valuing those portfolios.

(e) To what extent does the term of IP rights at the margin affect investment decisions?

It has no effect at the margin. The discount rate sees to that.

(f) How well does the UK IP system promote innovation?

Every individual creator makes their living by innovative expression - whether they are composing music or writing up a local council meeting. If their expression is not innovative they are, rightly, liable to be pursued for plagiarism.

The NUJ believes that freelance journalists have a particularly strong contribution to make to innovation and diversity of expression in the news media; a major reason that editors make use of their work is, after all, that they contribute fresh ideas and expression from outside the corporate culture. Distortions of the market in their work and impositions of unfair contracts therefore hinder innovation to the extent that they make freelance journalism less economically viable and cause many experienced practitioners to switch to less innovative work. See 1(a) above.

(g) To what extent does your organisation make use of other methods used by Government to encourage innovation, such as public funding?

No such funding applies.

(h) Are data on the use of patents and other forms of IP useful as a means of measuring innovation?

N/A

(i) Do you have any evidence as to the static or dynamic costs that IP rights (as statutory monopolies) impose on the economy?

We have no numerical evidence. Though the copyright held by a freelance journalist may, following US legal parlance, technically be called a "statutory monopoly", a vast ensemble of work being held by thousands of freelances is in no sense an economic monopoly.

Where publishers coerce assignment of rights, however, issues do arise for the wider economy. We note this week's report to the EU Commission from economists at Toulouse University and the Free University of Brussels on the costs of Reed-Elsevier and Springer Verlag's policy on scientific journals, and observe that the former is in our members' experience probably the publisher most likely to coerce assignment of rights in work for its trade and consumer magazine titles as well as in that for academic journals 9

(j) Have you encountered patents or other IP rights being used defensively, i.e. obtained not to develop products, but only to prevent others from doing so? Under what circumstances do you consider this acceptable?

No.

3. How IP is licensed and exchanged

(a) How easy is it to negotiate licences to use others' IP for commercial or non-profit purposes?

As noted, it is in principle easy. You find the freelance - the NUJ's Freelance Directory 10 , among other sources, will be useful. You phone them or email them, specify the use required and make an offer. Then you negotiate.

(b) What mechanisms do you use for finding potential licensing partners?

Most freelance NUJ members approach publishers and producers with proposals to create copyright works on the freelance's initiative. This is an important source of creativity, innovation and diversity in news reporting and cultural and political commentary. More generally, such initiatives by freelance authors' are a vital - probably the main - source of innovation in the cultural production of UK plc.

Freelances may also be approached by publishers and producers with commissions to produce copyright works. The innovative expression of the idea commissioned and of the facts researched is still theirs and in law the position is no different from that obtaining when they pitch the idea, nor is there any reason for a difference.

Copyright in work that journalists do in the course of employment, however, is under current UK law assigned to the employer. The NUJ believes that innovative expression would be encouraged if employed journalists were entitled to an equitable share of income from further uses of their work, such as database sales and syndication, as is the case in all EU states except the UK, Ireland and the Netherlands.

(c) How easy is it to use others' IP for research purposes? Have you experienced difficulty around research exemptions?

The existing "fair dealing" exceptions to copyright provide adequate access to copyright materials for research purposed. Closed DRM systems, however, threaten this: see main submission.

(d) Are there specific barriers to licensing in the main forms of IP currently used: patents, copyright, trade marks, and designs?

See main submission.

(e) Are there barriers to licensing IP on grounds of cost? What drives these costs?

No.

(f) Are there specific barriers to licensing IP in your sector?

No.

(g) Does your organisation use methods to facilitate exchange of IP - such as cross-licensing or pooling IP rights with other firms or organisations?

No.

(h) Are there specific barriers to licensing IP rights for small businesses or individuals - for example barriers to entry to patent pools?

N/A.

(i) Are there barriers to trade and exchange of IP internationally?

See 1(d).

(j) Does your organisation consider renewing patents using licence of right provisions in patent law (which entitle any person to a licence under your patent and reduce your renewal fees by half)?

N/A

(k) What could be done to improve licence of right provisions and business awareness of them?

N/A

(l) Do you have any experience of the compulsory licence provisions within current patent law? Are they effective? How could they be improved?

N/A

4. How IP is challenged and enforced

(a) Are there specific problems with enforcing the main different forms of IP: patents, copyright, trade marks, and designs?

Yes: there is a serious problem in that freelances are denied effective access to justice, since the costs of legal action usually exceed the sums to be recovered. We make a specific proposal for Small Copyright Claims Courts: see main submission.

(b) Are there barriers to challenging infringement and enforcing your IP rights on grounds of cost? What drives these costs?

See 4(a) above.

(c) To what extent does your organisation make use of other methods than litigation to resolve IP infringement cases, for example the Patent Office opinion service, mediation services, Alternative Dispute Resolution, or the Copyright Tribunal?

Negotiation. But see main submission.

(d) To what extent do you use IP litigation insurance? How effective is it?

We are not aware of any policies which would be affordable by or economic for our members. See main submission.

(e) Are there barriers to using such methods to settle IP disputes without recourse to litigation? How might they be removed?

The NUJ proposes a modest extension to the Small Claims Court system is the appropriate response to give freelance authors access to justice. See main submission.

(f) Are there specific barriers to challenging and enforcement of IP rights for small businesses or individuals?

Yes. See main submission.

(g) To what extent is the risk of litigation a factor in your organisations investment in innovation?

N/A.

(h) What are the principal barriers to efficient and successful challenge and enforcement internationally?

The barriers to litigation in other jurisdictions are even steeper than those facing an individual freelance litigating in the UK. See main submission.

SPECIFIC ISSUES

Current term of protection on sound recordings and performers rights

Background: The Review will fulfil the Governments commitment to examine whether the current 50 year term of protection on sound recordings and performers rights in sound recordings is appropriate, in the light of its extension to 95 years in a number of other jurisdictions.

(a) What are your views on this issue?

The NUJ supports the call by performers' organisations  for their rights to have parity with those of authors.

(b) Is there evidence to show the impact that a change in term would have on investment, creativity, and consumer interests?

From basic economic theory, term has negligible effect on investment decisions, since the discount rate wipes out any considerations more than 20 years into the future.

(c) Are you aware of the impact that different lengths of term have had on investment, creativity, and consumer interests in other countries?

See (b) above.

(d) Are there alternative arrangements that could accompany an extension of term (e.g. licence of right for any extended term)?

Licence of right is a patent concept, isn't it? If so, N/A.

(e) If term were to be extended, should it be extended retrospectively (for existing works) or solely for new creations?

Retrospectively, for performers.

Copyright exceptions - fair use / fair dealing

Background: There are a number of exceptions to copyright that allow limited use of copyright works without the permission of the copyright holder.

(a) What are your views on the current exceptions in copyright law?

The exceptions subject to the three-step test set out in the EU Infosoc Directive strike a fair balance between the needs of society and of vulnerable groups and the needs of creators. See Fair dealing and exceptions, main submission.

(b) Could more be done to clarify the various exceptions?

See main submission.

(c) Are there other areas where copyright exceptions should apply?

No.

(d) Are the current exceptions adequate or in need of updating to reflect technological change? For example copyright law in the UK does not currently have a private fair use exception. Such an exception might allow individuals to copy music CDs onto their PC and MP3 player for their personal use. Should UK law include a statutory exception for fair use?

In UK law it's "fair dealing": "fair use" is a term of art in US law. The major problem facing the exceptions is the spread of "locked-down" DRM. See main submission.

(e) How would you see content owners being compensated for such use?

N/A.

(f) To what extent has technological change presented difficulties in use of copyrighted material in the field of education?

From the point of view of NUJ members, the sole change introduced by new technology has been to make the act of copying easier and thus to increase the need for education of educators about copyright.

(g) Are there issues concerning the archiving of material covered by copyright?

If by "archives" this question means public libraries and archives, then from journalists' point of view there is no issue not covered by existing fair dealing precedent and legislation. If, however, the question refers to commercial operations that might better be termed "warehouses" of copyright work, then there are serious issues. It is not unusual for a journalist to pay US$3 to retrieve a single copy of their own article, published overseas, from, for example, Reed-Elsevier's Lexis-Nexis database. This constitutes syndication of an individual article to an individual user - in this case the author themself. Use and practice in the print industry is that freelances who retain their copyright receive 50% of syndication income where (as in this case) syndication is initiated by the publisher. That'll be $1.50, please.

Copyright - digital rights management

Background: Increasingly digital media content is distributed with digital rights management (DRM) technologies that can enable rights-holders to track usage and prevent unlicensed copying by technological means. However concerns have been raised about interoperability and that such technologies may impair the content consumers legal rights. For example they may be unable to take into account exceptions to copyright, the ultimate expiry of copyright term, or the future evolution of technology. They may therefore undermine legitimate rights to access digital content, now and in the future. (NB: We are aware of all formal submissions that have been made to the All Party Parliamentary Internet Group on this issue.)

(a) Do you have a view on how the use of digital rights management technologies should be regulated?

Yes. Strong ones. See main submission.

Copyright - orphan works

(a) Have you experienced any difficulties in identifying the owners of copyright content when seeking permission to use that content?

No; we have played a part in solving them by referring would-be licensees to authors. See Identifying rightsholders (main submission).

(b) Do you have any suggestions on how this problem could be overcome?

Yes. See Identifying rightsholders (main submission) and 'Orphaned works' (main submission).

Copyright - licensing of public performances

(a) Have you encountered problems with the system of licensing and paying royalties to collecting societies for public performance of music and/or sound recordings?

Entire question N/A.

(b) Could the system be clarified or simplified, and if so how do you see this working?

N/A.

Patents - utility models

Background: Some countries, notably Germany, have a utility model system offering protection for simple inventions, usually subject to less examination and shorter terms than standard patents.

Entire question N/A.

Pharmaceutical Supplementary Protection Certificates (SPCs)

Background: SPCs are a sui generis IP right available in EU Member States for pharmaceutical products (as well as plant protection products). The standard patent term is 20 years. SPCs aim to compensate rights holders for the time required to obtain regulatory approval for their products. Where regulatory approval is issued more than five years after a patent is granted, SPCs may be granted to extend the term of protection on the active ingredient in the patented product. SPCs last for a term corresponding to the period elapsed between the five-year point and the point at which the product reaches market, up to a maximum term of 5 years.

Entire question N/A.

Trade Marks - international issues

Entire question N/A.

Designs - registered designs and unregistered design rights

Entire question N/A.

Legal sanctions on IP infringement

(a) Are you aware of any inconsistencies or inadequacies in the way the law applies legal sanctions to infringement of different forms of IP or to different circumstances?

The difficulties are, as noted above, more with access to justice than with application of law: see main submission.

(b) For example, should criminal sanctions on online infringement be the same as those relating to physical infringement?

We are not aware of the criminal provisions of the Copyright, Designs and Patents Act 1988 ever having been used. We observe that current drafts of the EU Enforcement Directive follow existing law very closely. In principle, sanctions for abuse of authors' rights should be technology-neutral. Whether the illicit copy is electronic or built in plywood 11 , sanctions should relate to the damage done.

Coherence between competition policy and IP policy

(a) Has your organisation experienced any activity linked to IP rights that you regarded as unfair competition?

Yes - or rather abuse of dominant positions. See Levelling the playing field for authors (main submission).

(b) How did you deal with this problem?

The NUJ has negotiated, through the offices of ACAS, an agreement 12 with Guardian Media Group concerning respect for the copyright of freelance contributors to the Guardian and Observer and minimum terms for licensing use of their works. As a trade union the NUJ naturally does all in its power to negotiate further agreements. Managements resist, and are under no legal obligation to negotiate on matters concerning the engagement of freelances. See main submission.

(c) Was competition law effective at controlling this behaviour?

Not yet. See main submission.

(d) Should competition law have a greater role to play in regulating IP?

Yes. See main submission.

(e) How would you see the system working?

See main submission.

Parallel Imports / International Exhaustion

Background: European law does not allow firms to use trade mark or copyright law to prevent their goods sold in one EEA Member State from being imported and resold in another Member State i.e. they are not able to segment the EU market. However European law does allow the use of trade mark and copyright law to restrict the imports to EU Member States of goods sold outside the EEA. It also specifically inhibits EU Member States from legislating to remove such import restrictions at the national level - so called international exhaustion of trade marks or copyright. There has been a good deal of debate, both here in the UK and at EU level, about the costs and benefits of removing restrictions on parallel imports. There is a further issue of firms taking advantage of variations in prices on pharmaceutical products across the EU and repackaging drugs bought cheaply elsewhere within the EEA to resell within the UK.

(a) Has your company been affected by parallel trade?

No. The NUJ is not aware of, nor would it seek, restrictions on the sale of publication using licensed journalistic work across any frontier.

(b) What would be the impact on your organisation of a change in the current rules?

To restrict the sale of journalistic publications across any frontier would be a restriction on the freedom of the press.

(c) What evidence is there of the costs and benefits, both for consumers and firms of the current rules?

N/A.

Notes

9 See http://media.guardian.co.uk/newmedia/story/0,,1756544,00.html accessed 20/04/06.

10 See www.freelancedirectory.org

11 See "Grand theft auto: Photographer wins £5k+ in earth-shaking case" at www.londonfreelance.org/fl/0212nhm.html

12 Reported at www.londonfreelance.org/9903gdn.html

 
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